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tv   Nightly Business Report  PBS  September 9, 2009 7:00pm-7:30pm EDT

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captioning sponsored by wpbt >> so it doesn't feel like a strong economy and it's not a strong economy. but it's an improving economy, and that's a very important part of what we need to go through in order to have an ultimately very healthy economy. >> susie: chicago fed bank president charles evans joins us for his first television interview. he tells us the fed will raise rates when the unemployment rate starts dropping. >> paul: president obama is preparing for a high-stakes speech to congress tonight. the goal: convincing the public and lawmakers to get behind his health care reform plan. >> susie: steve jobs is back on the job, taking center stage at an apple product launch. apple fanatics welcome his return, but pan the updated ipods. >> paul: i'm paul kangas. >> susie: and i'm susie gharib.
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this is "nightly business report" for wednesday, september 9. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you. good evening, everyone. president obama spells out his vision for national healthcare tonight. he will deliver a speech to a joint session of congress to explain the need to overhaul the nation's health care system.
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his address comes after weeks of rowdy town hall meetings across the country where american voters spoke out against reform. washington bureau chief darren gersh joins us now with more on what to expect. >> reporter: the president plans to take the health care debate back to basics in his speech tonight. the president's goal tonight is to remind americans confused by the debate, so far, of the key reasons he is pushing for health care reform. topping the list is extending coverage, says white house adviser melody barnes. >> we know that 14,000 people a day are losing their coverage, and he wants not one more american to be among them. secondly, that for those who don't have coverage right now, he wants to make sure they can afford it. thirdly, he also wants to make sure we are in a trajectory to drive down the cost of healthcare in our system right now. >> reporter: barnes says the president still favors a so-called "public option" as an effective way to control costs. but max baucus, the chairman of the influential senate finance committee and the point man on bipartisan negotiations, says that idea is going nowhere.
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>> i think, frankly, with increasing conviction that a public option cannot pass the senate. >> reporter: republican senate leader mitch mcconnell say the american people have come to the same conclusion. >> i think our view is, let's scale it back, target the problems, and not have the government take over, in effect, all of american healthcare. >> reporter: the president is now caught between two wings of his party, with liberal democrats like barbara lee arguing only the government bargaining power backing a public plan can bring down health care costs. >> without fixing the entire system, we'd just be tinkering around the edges of a broken system, applying a band-aid where full resuscitation is what is required. >> reporter: as a compromise, barnes says the president will address the idea of a trigger mechanism to create a public option if the private sector fails to control health care costs. >> it goes to this idea of
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competition and choice. as you were saying, you'll see the trigger will trigger a public option only if you aren't finding the requisite amount of competition in a particular state or a particular marketplace. >> reporter: former clinton adviser bill galston says obama tonight will try to keep faith with his democratic base, while also stressing that doing nothing is not an option. >> he's sent every credible signal i can think of that if a bill comes to his desk without a public plan, but that enhances coverage and does some things on the cost side, he'll sign it. >> reporter: the white house has released portions of the speech and the president will say the time for bickering is over and now is the time for action. many of the analysts i spoke to expect some kind of reform, but they say the odds of this sweeping trillion dollar plan are down to 20% or so. >> susie: so if it's not going to be this big spansive plan, what will reform eventually look like if it does go through? >> reporter: a good bet is it
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might look like something like what they did in massachusetts. so it might have an employer and an individual mandate that you have to buy insurance. but it will also have insurance market reforms that will mean that pre-existing conditions are no longer something people have to worry about. and it might also have subsidys to help people who can't afford insurance to be able to buy it. >> susie: so how much do you think that those town hall meetings had on reshaping this process? >> reporter: they got a lot of attention, didn't they? it really depends on who you ask. if you ask republicans, they say that the people have spoken, they don't like big government plan, and that's what the town hall meeting showed. democrats would say that basically what this showed is that people are confused about health care, and that the president has to come here tonight and explain what this is all about. >> susie: so then what happens next? the president gives his speech tonight, congressional leaders go back to their constituents. what's next in the process? >> reporter: well, we're going to hear from this bipartisan
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group, as you heard in the piece that i did, max baucus who is the chairman of the finance committee has been working with them for months, they've been locked in a room trying to come up with a deal. we'll know in the next week or so exactly what that deal is and how many of these republican senators are on board. then we'll see that work through the process in the senate finance committee. then it will go through the usual process of the senate doing their work, the house doing their work. and we'll see where we end up. >> susie: do we know about that process, it's a very long and arduous. do you think there will be a bill on the president's desk sometime this year? >> reporter: there will be a bill. it will be called health care reform. it depends on how you define that. democrats can define it the way they want. you might have a small package of 100 to $200 billion. that's what's considered small in this debate. you might get the more $500 billion plan which would have the insurance market reforms, which have to be coupled with some kind of mandate that
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people buy it, and some kind of subsidies in order to make the whole thing work. the odds of this trillion dollar package that we've heard so much about look like they're down to 20% what is i'm hearing from analysts who cover it very intensively. >> susie: all right, sounds like the debate continues, and these next couple of weeks will be critical. thank you for joining us. darren gersh. >> paul: wall street added modest opening gains to yesterday's rally as higher commodity stocks continued to bolster the market. after an hour, the dow posted a 21-point advance with the nasdaq up ten points. the market took on a more bullish tone with solid gains in blue chips like caterpillar and boeing. at midday, the dow was up 65 points and nasdaq posted a 25- point gain. an afternoon pullback was cushioned by the fed's fairly upbeat beige book report as stocks closed moderately higher. the dow jones industrial average ended up 49.88 at 9547.22. the nasdaq gained 22.62 to
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2060.39. the s&p 500 rose 7.98 to 1033.37. >> susie: the economy continues to improve in most parts of the country. that's the conclusion of the federal reserve's latest survey on economic activity. fed policymaker, charles evans, president of the federal reserve bank of chicago and a voting member of the central bank's interest rate setting committee. earlier today i sat down with evans for an exclusive interview.
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where people are concerned about losing their jobs won't spend money. my first question to evans, is the recovery on track. >> well, i think the economy is beginning to recover. i think that for the second half of this year i'm looking for the economy to grow about 256789 to 3%, and i think it will do that over the next 18 months. i think that the contraction is pretty much behind us, so i'm looking for growth. >> susie: if, mr. evans, the economy is improving, why are we hearing more and more forecasts calling for a double dip recession? >> well, i think there are still a lot of uncertaintys, and as soon as you start thinking about which elements of the economy will be growing you always starts scratching your head. i think the consumer is very important for the recovery, and obviously there are issues about how high the savings right might be, that would tend to restrain growth of the consumer a bit. businesses have already cut
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back so much on discretionary expenditures and they've cut employment dramatically and so there continue to be concerns about when the hiring margin will begin to pick up. >> susie: but can there be real recovery without job growth to go with it? >> that will be the hard part. we'll be seeing the unemployment rate continue to go up, i think, until the first quarter of next year. and it's not going to feel like a recovery because of that. >> susie: when do you see the economy getting to full employment? and by that i mean a jobless rates of around 5%. >> unfortunately, i think that's a few years away. i would guess that at the end of 2010 the unemployment rate will be about 9%, in 2011 it's going to be uncomfortably high, probably in the 7's, so it's going to be beyond that time frame. >> susie: when you talk to consumers and businesses in your district, what are they telling you, how are they doing in terms of getting loans, getting jobs, making money? >> consumers are worry about
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their job prospects, and whether or not they'll continue to have a job, and that's restraining consumption spending. i think the decline in net worth gives rise to a higher savings motive, and so that restrains consumer spending. i think business are concerned about shoppers coming in on the retail side. i think that they are reasonably content with the size of their operations so, they're not going to be spending on cal tall equipment and expanding their activities. so that will restrain growth to some extent. >> susie: so can the economy count on consumers to be the agent of growth as did it in the past? >> i don't think it will be the same as it was in the past. in the last few years, we had stronger con some00 growth in part because net worth was higher, ek which prices were higher, health prices are higher, so now things are turned around so the added stimulus to consumer spending is not there and they're
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working against that. >> susie: so where is growth going to come from? >> at first it's going to come from an inventory adjustment. businesses have been very careful in paring back their inventoryes, they didn't want to have to pay for products on the shelves that weren't going to be bought. now they need to add and restock, that's a normal part of an initial recovery, that will add to growth. that will add to production. i think the rest of the world is beginning to do better as well so, we'll see some export growth, that will add strength as well. >> susie: mr. evans, you said today that the u.s. economy may be facing the great inflation 2.0. so how serious a danger is inflation? >> i don't think that inflation is a big problem at the moment, or for the foreseeable future. my own view is that inflation expectations are pretty well anchored and we're going to see inflation in the 1.5% range, probably over the next year to two. >> susie: so what is the federal reserve going to do to make sure that inflation doesn't do damage to the economic recovery? >> we're going to be keeping
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our eye on inflation, we'll be looking at inflation indicators and also expectations, and if inflation pressures were to begin to rise prematurely before we think they will much later in the economic recovery, we would respond aggressively as needed. >> susie: so how much longer do you think that the federal reserve will stand by its zero interest rate policy? >> i think the markers for that will be when the recovery takes hold, when unemployment starts coming down, when it's firmly embedded in the outlook, when businesses are truly forward looking. they're forward looking at the moment, but they have recently been looking to make sure that they are viable. then they'll be looking for growth, and before looking consumers their savings will be to the point where they're more comfortable with their financial system. i think that's most likely to be towards the end of 2010, 2011. >> susie: at that time, as the federal reserve begins to navigate away from zero interest rates, how will you mow if you're moving too fast
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or too slow? >> i'm not sure we'll exactly know the answer to that. there are always a lot of uncertaintys, and looking back on the period from 2004 to 2006, i think that increase in interest rates was perhaps a little too measured, not at the beginning but words the end. so i think we will be looking at that period and responding a bit more aggressively than we did at that time. i think we will have to make a very hard judgment about whether or not the recovery is firmly on hold, and how much inflationary pressures might be rising above the point that's consistent with our price stability objective. and it will be having to look at everything. >> susie: mr. evans, thank you so much for your time, very interesting conversation. >> thank you very much. >> susie: you can wash an extended version of our interview with charles evans or read the entire transcript on our website, on
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he's baaaaaaaaaack! apple c.e.o. steve jobs took the stage today at his company's product launch event in san francisco. at his first public appearance in about a year, jobs rolled out new versions of apple's popular i-pod, adding a video camera, microphone and speaker to its nano model. the device even has a pedometer and a built-in f.m. radio. it's priced at $149 for the eight gig model. the company also upgraded itunes, its digital media store, giving users more control over content. in spite of all the buzz, care- is and company analyst rob sear- uh says today's event is not a
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game changer for apple. >> susie: sear-uh also >> i don't think it changes the outlook. iphone is still the top of the line for apple. macs continue to be important for apple and today's events were a little of, hey, don't forgets about the ipod, we're still refreshing that and selling a lot of i pods. >> susie: he also recommends buying shares of apple, calling it the best computer products company, bar none. and paul, steve jobs also talked briefly about his liver transplant this spring, and urged everyone to become an organ donor. >> paul: susie, apple shares were among the nasdaq most active. we'll see them as we take a look at our stocks in the news tonight.
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>> paul: and those are the stocks in the news tonight, susie. >> susie: it's the place where disgraced financier bernard madoff confessed to his $65 billion ponzi scheme. now, his two-floor manhattan apartment is up for sale, along with his other high-end real estate. the apartment is worth about $7 million. madoff's $11 million estate in palm beach will also be auctioned. the government hopes madoff's infamy will drive up the sales price on both locations. a $2 million yacht named "bull" will also go to the highest bidder, as liquidators try to recoup money for madoff's victims. >> paul: tomorrow, more on madoff as senate lawmakers look into how the s.e.c. missed the biggest ponzi scheme in history. >> susie: the government says its efforts to help homeowners avoid foreclosure are showing progress. so far, 360,000 homeowners have reduced their monthly mortgage payments under the federal
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program called "making homes affordable." that's about 12% of the those believed to be eligible for the plan. a month ago that number stood at 9%. some consumer groups say applying for the program is still too difficult. >> paul: the lattes and frappucinos will keep brewing at 30 starbucks locations that were previously scheduled to close. that's because those stores have become more profitable recently, even as consumers are cutting back on costly coffee. starbucks hasn't said where those 30 stores are located. since july of last year, the company announced plans to close more than 900 stores globally.
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in the money file tonight, what many investment fraud victims have in common. here's harriet johnson brackey, personal finance columnist at the "south florida sun sentinel." >> reporter: i've been knee-deep lately in investment fraud. i'm talking about the ordinary everyday scummy stuff that happens when trusting people give other people their money. this year, there's been a huge increase in the number of securities disputes or arbitrations filed. after talking to dozens of investment fraud victims, i have come up with a couple of reasons why fraud is on the rise. the obvious one is greed, but
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really its greed combined with a willingness not to look too hard. if most of your friends and neighbors are getting a 5% and someone offers you 10%, the greedy take it. and they don't look back. the fraud victims i've met didn't check things out. the not-so-obvious reason is low interest rates and poor stock market returns. think about it. seniors, who want the safest investments or c.d.s, aren't getting much on their money because rates are near the bottom and low-risk investments produce low returns. you start pounding that kind of person with a slick sales pitch, and voila, you've got the next fraud victim. the research shows that seniors are targeted by scams more than any other group. i think the fraud numbers will go back down again, when the markets recover, when interest rates rise and when seniors are no longer scraping for every little bit of yield they can
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find. i'm harriet johnson brackey. >> paul: recapping today's market action: a fourth straight day to the upside for the blue chips. the dow gains almost 50 points and the nasdaq adds 22 points. to learn more about the stories in tonight's broadcast, to watch our streaming video and to take part in our daily blog, go to "nightly business report" on you can also email us at >> susie: and finally, adults aren't the only ones affected by economic tough times. kids are, too. that's why pbs and the folks at the sesame workshop have joined forces to help families with children thrive during this financial climate. they've put together a special prime-time program called "families stand together: feeling secure in tough times." it offers strategies and tips parents can use to help their young kids' emotional and physical well-being, coping with economic uncertainty. the program airs tonight on most pbs stations. please check your local listings
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for the specific time in your area. paul, looks really good, doesn't it? >> paul: sounds like worth while viewing to me. >> susie: and fun, too. that's nightly business report for wednesday, september 9. i'm susie gharib good night, everyone, and good night to you, paul. >> paul: good night, susie. i'm paul kangas wishing all of you the best of good buys. "nightly business report" is made possible by:
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this program was made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt captioned by media access group at wgbh
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